Monday, February 13, 2006

Marin House Prices "Plunge" in January

This is West Bay RE's latest commentary on January, 2006's market performance. I'll put together some charts tomorrow evening because I am too darned tired now.

What a way to start the year. Home sales in Marin County, while not at their lowest level ever, are certainly close to it. With only 114 homes sold in January, sales were off 28% from December and 24% from January 2005. This is the third lowest number of sales in any one month since we've been keeping records: January 1998.

The median price of single-family homes in Marin County also took a nose-dive in January, falling 8.6% from December to $877,500, and, gasp, down 5.7% from January 2005. This is the first year-over-year drop since June 2003. Also, it's the first time the median price has been below $900,000 since December 2004.

The question becomes, is this an aberration, or the start of a new trend? On one hand, the depth of the plunge in January is an aberration. On the other hand, the trend is towards a buyers' market. Looking at pending sales, we see an increase of 13% for homes and 29.6% for condos this month. This portends increasing sales in the month's ahead.

Condo sales were also way down in January with 26 units sold, only one of the all-time low of 25. Interestingly, condo prices set new record highs with the median price rising 12.1% from December to $580,000 and the average price gaining 24.5% to $719,763. That's a rise of 39.1% year-over-year, another aberration.

12 Comments:

Blogger David said...

The YoY is now negative in God's county. D*mn. Let's see how the realtors will spin this.

1) Its a winter month
2) The houses that were selling were significantly smaller and or in less desirable locations then what sold last year this time.

Neverthelees, this is a major turning point in Marin County's housing bubble history.

Marinite, Keep up the superb blogging.

David
Bubble Meter Blog

Feb 14, 2006, 8:07:00 AM  
Anonymous Anonymous said...

If I am a buyer why buy now -- why not wait unil we get another 5%, 10% reduction? Of course no real estate supported newspaper or economist will dare tell you that. Nor will they tell you that if you bought a house a year ago, paid 10% down you now have negative equity (5.7% price fall plus the 5% to 6% that goes to the real estate agent). Leverage is a great thing except in a falling price environment.....

Feb 14, 2006, 8:41:00 AM  
Blogger backstairs said...

I am sure we will hear from realtors that now is a great time to buy at a discount, this is just an anomaly, blah blah blah. Same realtor hype. But you are correct, "why buy now when prices are coming down and as they are likely to continue doing? I save some if I buy now relative to the peak, but I can save a lot more if I wait." Most people who couldn't wait to buy have already bought so what is left over are all the people who were willing to swallow the "bitter renter" pill and didn't buy. If they could wait this long they can continue to wait.

Feb 14, 2006, 9:48:00 AM  
Blogger fredtobik said...

www.zillow.com

My home is worth 40% from when I bought it 2 years ago. :O

Feb 14, 2006, 10:24:00 AM  
Anonymous Anonymous said...

Fred

I presume you meant to say my home is worth 40% more than you paid two years ago and I presume by the link to zillow this is where you get the data.

I also assume that you would agree that if I put up a house for sale at a price and it does not sell for six months its not worth the asking price. Furthermore if I reduced the price and it still didn't sell it would be safe to say at present its not worth this reduced price.

My house I sold in Marin according to Zillow is worth $1.46 million but the person who bought the home from me after I realized a 75% gain in value (from 98 to 2002) has the house listed at $1.245 million -- its been on the market for more than 6 months and I know she has NO interested parties.....mmmm think the Zillow website may have very very very flawed data.....so I hope you are getting your data from a more reliable source......

Feb 14, 2006, 2:52:00 PM  
Anonymous Anonymous said...

fred, maybe you should unload it now so you aren't underwater in a matter of months. Include the commissions and the carrying costs in your ROI calculations.

If you find comfort in a free website like zillow - great.

If it was the kind of money that median prices in marin imply, I would do some of my own dd. If you do, I think you will find you are on thin ice.

Or perhaps we just see things differently.

Feb 14, 2006, 3:33:00 PM  
Anonymous Anonymous said...

fred, maybe you should unload it now so you aren't underwater in a matter of months. Include the commissions and the carrying costs in your ROI calculations.

If you find comfort in a free website like zillow - great.

If it was the kind of money that median prices in marin imply, I would do some of my own dd. If you do, I think you will find you are on thin ice.

Or perhaps we just see things differently.

Feb 14, 2006, 3:33:00 PM  
Blogger Marinite said...

Zillow is in beta release which means it is very buggy. Other people who have been playing with it quite extensively have noted on various other blogs that currently zillow's results are not to be trusted as they tend to over-estimate sale prices.

Feb 14, 2006, 3:39:00 PM  
Blogger fredtobik said...

Ya I was really joking about it, I am a marinite for life!

Feb 14, 2006, 5:05:00 PM  
Blogger sf jack said...

fred -

What happens if we have a bunch of cold coastal Januarys and enviro-whackos getouttahand and demand and end to Marin golf courses?

You won't be able to wear your shorts on the links in January!

I can't see an alternative - you'll have to move. Monterey? But you'll be farther from skiing. Oh, no.

In any case, given that your beloved zillow site appears flawed, let's say this happens five years from today and that combined with inflation, your place is up 10% in real terms, at best - over 7 or so years (2004 to 2011).

Now, is that something to be so overtly excited about?

Feb 14, 2006, 8:03:00 PM  
Blogger fredtobik said...

sf jack:

My life does not revolve around money.

I have been thinking of Mountain Biking and hiking more anyway.

I could care lesss if I have to sell my house in x years, and not make a dime.

Feb 15, 2006, 9:36:00 AM  
Blogger sf jack said...

fred -

Good for you!

"My home is worth 40% from when I bought it 2 years ago. :O "

Feb 16, 2006, 12:12:00 PM  

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